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NACE: How the revision of a classification can affect quality of statistics

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Title: NACE: How the revision of a classification can affect quality of statistics


1
NACE How the revision of a classification can
affect quality of statistics
  • Ana Franco

2
NACE a tool for comparing statistics at world
level
  • The European Classification of Economic
    Activities (NACE) is the European reference
    framework for the production and the
    dissemination of statistics related to economic
    activities.
  • NACE is identical with, or an extension of, the
    ISIC (International Standard Industrial
    Classification of all Economic Activities -
    classification developed by the UN as a standard
    way of classifying economic activities). Also,
    the coding systems used in both classifications
    are, as far as possible, the same.
  • The main principle in ISIC and NACE is to code
    together enterprises if they produce the same
    type of goods or service or if they use similar
    processes (i.e. the same raw materials, process
    of production, skills or technology).

3
NACE The revision process
  • At its thirtieth session in 1999, the United
    Nations Statistical Commission agreed that the
    ISIC should be revised every five years, thereby
    keeping the classifications relevant while
    avoiding major disruptions in time series. NACE
    has followed this revision round and NACE Rev. 2
    entered into force in 2008.
  • The purpose and rationale for these revisions is
    to repair weaknesses in the classifications, to
    reflect changes in technology or economic
    organization, to respond to new and permanent
    demands for data and to achieve greater
    comparability or convergence among different
    classifications.
  • Focused work on the revision of ISIC/NACE started
    in 2001 and the regulation establishing the
    statistical classification of economic activities
    NACE Rev. 2 was adopted on the 20th December of
    2006.

4
NACE The revision process (stakeholders)
UN
EUROSTAT
UN Statistical Commission
Statistical Programme Committee
NACE/CPA Working Group
UN Expert Group
Technical Subgroup
Task force
5
Revision of NACE an opportunity to improve
quality
  • Relevance
  • Accuracy
  • Timeliness and punctuality
  • Accessibility and clarity
  • Comparability and coherence
  • Cost and Burden

6
Relevance
  • During the process of revision of NACE/ISIC the
    opinion of the users was carefully taken into
    account.

UN World-wide consultation How 3 rounds of
questionnaires To whom 235 countries and
international organizations worldwide When from
2001
EU Large consultation -National Statistical
Institutes (NSIs) - European trade associations
(FEBIs) - European Commission - Eurostat -
European Central Bank - And anybody else using
the classification
FAO
Working Party on Indicators of the Information
Society
Association of Southeast Nations
Afristat
Workshops in different regions of the world
UN Technical Subgroup
NAICS/NACE convergence project
NACE Rev. 2
7
Relevance
  • As one could expect in such a large operation of
    identification of user needs, it has been
    impossible to take all wishes into account.
    Nevertheless, some general concerns were
    identified and the result is a revised
    classification with
  • New groupings
  • Information and communication sector
  • water supply, sewerage, waste management and
    remediation
  • More tabulation categories for services
  • professional technical, and business services
  • administrative and support services
  • real estate, rental and leasing services
  • art, entertainment and recreation
  • More divisions ( to increase international
    comparability)
  • for new groupings and growing services
  • in manufacturing and construction
  • human health services

8
Accuracy
  • Correspondence between NACE Rev 1.1 and Rev.2

Rev 1.1 Rev.2 1 1
Rev 1.1 Rev.2 a 1 b c
Automat i c
196
18
Rev 1.1 Rev.2 a b c 1 d e
Manual
Good occasion to correct errors!
86
Rev 1.1 Rev.2 a e b f c g h
214
9
Timeliness and punctuality
  • Labour Cost Index
  • Job Vacancy survey
  • Inform. Soc.

Business registers updated
Start of revision
National Accounts
End-2006
2001
2008
2009
2010
2011
Adoption of regulation
  • Business register
  • Labour Force Survey
  • Road freight survey
  • Structural Business Surveys

10
Accessibility and clarity
  • A dedicated web page which would contain all
    available information on NACE Rev.2
  • 1.1 the structure of NACE Rev. 2,
  • 1.2 the introductory guidelines,
  • 1.3 the explanatory notes for each code
  • 1.4 the text of the Framework regulation
  • 1.5 the Implementation regulation.
  • 1.6 the correspondence tables between NACE Rev. 2
    NACE Rev. 1.1 and NACE Rev. 1.1 - NACE Rev. 2
    in different formats
  • 1.7 Five Handbooks to help National Statistical
    Institutes during the complex project of the
    implementation of NACE Rev. 2
  • - Setting up an implementation plan for NACE Rev.
    2
  • - Implementation of NACE Rev.2 in Business
    Registers
  • - Handbook on methodological aspects related to
    sampling designs and weights estimations
  • - Handbook on back-casting
  • - Rules for classification of units outsourcing
    their production
  • A paper publication which will regroup the
    elements mentioned under 1.1 to 1.5.

11
Accessibility and clarity
  • A CD Rom containing the same information can be
    created at request
  • A general paper informing on the main changes
    brought by the new classification has been
    prepared. This information will be visible in the
    Eurostat web site and will contain a link to the
    dedicated web page above mentioned.
  • The SDDS files, detailed metadata files presented
    in a common format which are associated with the
    data base New Cronos containing all EU data
    published by Eurostat, will be revised informing
    the users on the changes in the activity
    classification and on the specific impact for the
    statistical domain.

12
Comparability (between geographical areas)
  • Among EU countries
  • Use of NACE is mandatory within the European
    Statistical System Regulation (EC) No 1893/2006
    of the European Parliament and of the Council of
    20 December 2006
  • Although national versions allowed
  • And there are also
  • Explanatory notes
  • Introductory guidelines

13
Comparability (between geographical areas)
  • But also with the rest of the World
  • Agreement signed by the heads of the statistical
    agencies of Canada, the European Union and the
    United States concerning a project on the
    convergence of NAICS and NACE
  • A taskforce consisting of experts from the
    participating parties have drawn up a list of
    changes to NACE and NAICS which may improve the
    convergence.
  • In addition, ISIC had taken into account these
    revisions to other major national industry
    classifications such as ANZSIC (Australia and New
    Zealand), JSIC (Japan) and NatSIC (China).

ISIC NACE
NAICS (USA, Canada, Mexico)
14
Comparability between statistical domains
  • Data is published by Eurostat according to NACE
    in 33 different statistical domains
  • Solutions
  • Dual coding
  • Back casting

2008 21
2009 3
2010 6
2011 3
15
Comparability over time
282
NACE Rev 1.1 NACE Rev.2
Sections 17 21
Divisions 62 88
Groups 224 272
Classes 514 615
Correspondences
1 to 1 196
n to 1 86
1 to n 18
n to m 214
  • Discontinuity in historical statistics is to be
    expected in many statistical domains, both at
    European and national levels
  • Solutions
  • Dual coding
  • Back casting
  • Correspondence tables

16
Coherence
Economic Activities
Products
Goods
ISIC
CPC
HS
SITC
World level
NACE
CPA
PRODCOM
CN
EU level
National versions of NACE
National versions of CPA
National versions of PRODCOM
Nat. Level
17
Cost and Burden
  • The revision of NACE will imply several
    operations in the Member States
  • The setting up of the implementation plan
  • The recoding of the Business Registers according
    to the new NACE (or its national version)
  • The adaptation of the statistical surveys
    (samples and estimation techniques)
  • The reconstruction of time series (double
    reporting, back-casting)
  • The changes of the reference database and related
    dissemination issues
  • The elaboration of the national version of NACE
    and the adaptation of national legislations
    following the adoption of the Regulation
    establishing NACE

33!
32!
18
Conclusion
  • The revision of a classification, although a
    costly and heavy operation is absolutely needed
    and is a good opportunity to improve the quality
    of the date produced using it.
  • Relevance is for sure the quality component which
    more benefits in such a revision.
  • It is a good opportunity to improve geographical
    comparability
  • Accuracy can also be improved in the operation of
    updating of the register
  • A revision of a classification always entails
    breaks in the series,
  • Not all the statistical domains are able to use
    the new classification at the same time
  • In the transition period timeliness can undergo.
  • The information of the users shouldn't be
    neglected and it is important not only to provide
    information on the new classification but also on
    its impact for the data in the different
    statistical domains.
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